(Bloomberg) -- Banks in Turkey have increased scrutiny of transactions linked to Russia to avoid falling foul of US sanctions and put the NATO member more in line with Washington in efforts to undermine Vladimir Putin’s war machine. 

The move has led to longer processing times for money transfers and instances where funds are sent back or delayed for days, bankers familiar with the matter said. They declined to be identified because they were not authorized to speak. The Treasury and Finance Ministry declined to comment.

The tightened approach was in response to an executive order from US President Joe Biden that allows Washington to impose secondary sanctions over the war in Ukraine, according to other people involved. The changes were updated on the Office of Foreign Assets Control page in late December and then Turkish banks took action, the people said. 

China and the United Arab Emirates, two key trade hubs for Russia, have also been tightening curbs on funding to Russian clients. The squeeze in Turkey comes as the nation seeks to be removed from an international “gray” list of jurisdictions deemed incapable of tackling money laundering. The designation hampers Turkey’s chances of luring foreign investors. 

So far, scrutiny by the Turkish banks have resulted in a “slowdown” in transactions by the banks and exporters have been experiencing difficulties in receiving payments, said Mustafa Gultepe, the head of Turkey Exporters Assembly. Trade Minister Omer Bolat said that the government was addressing the problem. 

--With assistance from Taylan Bilgic and Selcan Hacaoglu.

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